Move Freelancers & Contractors to an Employer of Record (EOR) in the Philippines

Author: Philip Murphy — COO & Founding Partner
Reviewed by: Martin English — CEO & Founding Partner
Updated: November 21, 2025
Disclosure: This article is for informational purposes only and does not constitute legal advice.

TL;DR: What’s the fastest way to convert freelancers to employees in the Philippines?

Convert via Employer of Record (EOR) to reduce misclassification risk, improve retention, and scale without a local entity.

• Cost: $190/employee/month EOR fee + salary + statutory benefits.

• Speed: Transition teams in days with compliant contracts.

• What you get: Payroll, benefits, monitoring, HR/account management.

• Next step: Book a call or Submit scope.

 

Key takeaways

• Converting Filipino freelancers and contractors to employees via an Employer of Record (EOR) is the fastest way to reduce misclassification risk without opening a local entity.

• SOS charges a flat $190/employee/month EOR admin fee on top of salary and statutory benefits, with most teams converted in days, not months.

• You keep day-to-day control of work and KPIs; SOS becomes the legal employer and runs payroll, benefits, HR, and monitoring.

• Moving to EOR improves retention, professionalism, and investor confidence because staff receive payslips, benefits, and proper employment status.

• You can convert an entire team at once or run a small pilot and scale up once you’re comfortable.

 

Who is this guide for?

This guide is for:

• US, AU, UK, EU companies currently working with Filipino freelancers or contractors.

• Teams with 5–100 remote staff (developers, customer support, VAs, finance, marketing, PMs, specialists).

• Leaders worried about misclassification, compliance, IP, or churn—but not ready to open a Philippine legal entity.

If you have a mix of freelancers, agencies, and direct contractors in the Philippines and want a clean, compliant way to move them into full employment, this is your starting point.

Why should you move freelancers & contractors to an EOR?

Startups often rely on freelancers to move quickly. But as you grow, this creates risks in compliance, fraud, retention, and IP.

With Smart Outsourcing Solution (SOS), you can transition freelancers or entire teams into fully compliant employees under an EOR—usually in just days, with no setup fees.

Benefits:

• Compliance: Align with DOLE Department Order 174 and Philippine labor rules to avoid misclassification.

• Retention: Employees stay longer with benefits, stability, and clear employment status.

• Scalability: Hire in the Philippines without opening a local entity.

• Fraud prevention: Vetting and monitoring ensure accountability.

• Professionalism: Investors and clients prefer structured, compliant teams with payslips and statutory proof.

 

How do you want to move your freelancers to EOR?

Use this page as your navigation hub and jump into deeper guides based on your setup.

By role or team type

• Developers: How to Move Freelance Developers to an EOR in the Philippines

• Customer Support: How to Move Customer Support Teams to an EOR in the Philippines

• Finance & Accounting: How to Transition Freelance Finance Assistants to an EOR

• Marketing & Creative: How to Convert Freelance Marketing & Creative Staff to an EOR

• Project Managers & Specialists: How to Move Freelance PMs & Specialists to an EOR

• Virtual Assistants: How to Transfer Virtual Assistant (VA) Teams to an EOR

By concern or risk

• Misclassification & legal risk: Remote. Misclassified. Fired. She Fought Back — and Changed the Rules

• Cost & budgeting: Full Cost of Hiring in the Philippines with an EOR

• Post-switch proof: 30/60/90-Day Post-Switch Health Check for Your New PH EOR

• Outgrowing EOR: When Should You Stop Using an EOR in the Philippines and Open Your Own Entity?

• Unhappy with your current EOR: Switch Your Philippines EOR Provider in 30 Days

(Replace the bullets above with your actual internal links when you implement.)

What risks do you face if you stay with freelancers?

Keeping long-term freelancers and contractors can feel flexible—but it can also become a liability.

• Legal liability: Misclassification lawsuits (for example, Jamsek v ZG Operations, HCA 2022) show the risk when contractors are treated like employees.

• Talent churn: Contractors can leave without notice, taking knowledge and client relationships with them.

• Fraud risk: Weak oversight and no local HR increases the chance of time theft, side jobs, and ghosting.

• IP exposure: Limited protection under RA 10173 (Data Privacy Act) and weak contracts can put code, data, and customer lists at risk.

If you suspect your “freelancers” behave more like employees, it’s time to consider converting them through an EOR.

Can an Employer of Record help us convert contractors to employees in the Philippines?

Yes. An Employer of Record becomes the legal employer in the Philippines, while you remain the operational manager.

In practice, that means:

• SOS signs compliant Philippine employment contracts with your current freelancers/contractors.

• We handle payroll, benefits, and statutory contributions.

• You keep the day-to-day management, KPIs, and workflows you already have.

This gives your team proper employment status without forcing you to open a company or rebuild your entire structure.

What does the $190/month EOR fee include?

The $190/employee/month fee covers the EOR admin and employment layer:

• Employment contracts and onboarding

• Payroll & statutory admin: SSS, PhilHealth, Pag-IBIG, 13th month pay

• Attendance and productivity monitoring

• Dedicated account management

• Basic HR support: leave, incidents, replacements

Note: Salaries, statutory contributions, and equipment are separate. Proposals clearly itemise salary, employer costs, and the $190 admin fee per role.

If you want to compare this with your current freelancer costs, you can use the interactive calculator at the end of this guide.

What payroll & statutory obligations apply in the Philippines?

Once freelancers are converted to employees, they fall under Philippine labor law:

• 13th month pay (mandatory under PD 851).

• Employer contributions: Social Security System (SSS), PhilHealth, Pag-IBIG Fund.

• Probation, regularization, and termination due process as per DOLE rules (e.g., notice, grounds, documentation).

All of this is localized and detailed in proposals per role, so you can see exactly:

• Total cost to company (TCC) per employee.

• What portion is salary, statutory, and EOR admin fee.

 

EOR vs Staff Leasing vs PEO vs BPO: Which is right for you?

If you’re still deciding which model fits, here’s a quick comparison:

If your primary problem is “we have Filipino freelancers, but they probably look like employees”, EOR is usually the cleanest, fastest fix.

How do we move freelancers & contractors to an EOR in the Philippines step by step?

If you’re asking “How do we move freelancers and contractors to an EOR in the Philippines step by step?”, this is the exact flow we use with clients:

1. Assessment — Review contracts and scopes

   • Map who is currently engaged (freelancers, agencies, contractors).

   • Identify misclassification red flags and priority roles to convert.

2. Role Mapping — Align tasks to compliant job descriptions

   • Turn “freelancer tasks” into clean job descriptions (e.g., Support Specialist, EA, Developer).

   • For specific roles, see your role-by-role guides (Developers → EOR, Support → EOR, Finance Assistants → EOR, Marketing & Creatives → EOR, PMs & Specialists → EOR, VA Teams → EOR).

3. Contracts & Onboarding — Issue compliant contracts, collect payroll/KYC data

   • Offer letters, employment contracts, and onboarding packs.

   • Banking, tax IDs, KYC, and system access.

4. Go-Live — Payroll, benefits, and monitoring activated

   • Employees move under SOS as the legal employer.

   • You continue day-to-day management, now with payslips and statutory proof.

5. Through-Life Support — Ongoing KPIs, account management

   • Regular check-ins, performance tracking, and replacements where needed.

   • Integration with your internal reporting and finance processes.

Need a quick cost comparison?

If you want to compare freelancer vs EOR employee for each role:

👉 Use our Philippines EOR Cost Calculator
Enter role, salary and shift pattern to see total cost (salary + statutory + $190 EOR fee) side by side with your current freelancer or contractor spend.

How are employees monitored under an EOR while staying privacy-compliant?

We aim for transparent, proportionate monitoring:

• Tracking: attendance, role-specific KPIs, productivity signals.

• Method: transparent tools, employee notice, and clear policies.

• Goal: ensure performance without micromanagement or “spyware”.

Privacy compliance is aligned with RA 10173 (Data Privacy Act) and National Privacy Commission guidance, with:

• Legitimate purpose and necessity.

• Employee consent and awareness.

• Appropriate safeguards for any monitored data.

 

Will contractors accept conversion to EOR employment?

In practice, most Filipino freelancers and contractors accept conversion—especially when the change is communicated clearly and the net compensation stays attractive.

Common reasons they say yes:

• Stability: predictable salary, 13th month pay, and paid leave.

• Benefits: access to SSS, PhilHealth, Pag-IBIG and optional private benefits.

• Proof of employment: payslips and COEs that support loan, housing, and visa applications.

• Continuity: same work, same manager, same tools—just better protections and structure.

SOS supports you with email templates and FAQs you can share with your freelancers so the transition feels like an upgrade, not a loss of freedom.

FAQs: Common questions on converting freelancers to an EOR

1. How fast can we convert a team?

Most teams can be converted from freelancers or contractors to EOR employees within days, with longer timelines only for highly regulated or specialised roles.

2. What does the $190 fee include and exclude?

The $190 per employee per month fee covers the EOR administration layer: contracts, payroll, statutory filings, monitoring and account management. It does not include salaries, statutory contributions, equipment or performance-based bonuses.

3. Do we need a local entity to use an EOR in the Philippines?

No. You do not need to set up a local entity in the Philippines. SOS is the legal employer of record, while you stay in control of day-to-day work and KPIs.

4. How are payroll and benefits handled under an EOR?

SOS runs payroll, pays salaries, and administers statutory obligations such as SSS, PhilHealth, Pag-IBIG and 13th month pay, as well as any agreed employee benefits.

5. Will contractors accept conversion to EOR employment?

Most Filipino freelancers and contractors accept conversion when the change is explained clearly and overall compensation remains attractive, because they gain stability, benefits and proof of employment while continuing similar work.

6. How do we protect IP and confidential data when using an EOR?

IP assignment and confidentiality clauses are built into the employment contracts and internal policies, and data handling is aligned with Philippine data protection rules so that code, customer information and business processes remain protected.

7. What KPIs do you track for EOR employees?

Typical KPIs include attendance, service level adherence, volume or output metrics, error rates and any role-specific targets you define for the team.

8. Can we convert only part of a team to EOR?

Yes. Many clients run a phased rollout, converting an initial cohort of freelancers or contractors first and then moving the rest of the team once the model is proven.

How much does an all-in employee cost under EOR?

Want to see your actual numbers?

👉 Try our interactive calculator